It has been the general consensus that cAMP-mediated PKA-dependent phosphorylation of aquaporin-2 is the primary mechanism of vasopressin to regulate osmotic water permeability in kidney collecting duct. By using laser scanning confocal microscopy to monitor [Ca²⁺]_i and apical exocytosis in individual cells of inner medullary collecting duct, we have demonstrated that vasopressin also triggers intracellular Ca²⁺ mobilization, which is coupled to apical exocytotic insertion of aquaporin-2. Vasopressin-induced Ca²⁺ mobilization is in the form of oscillations, which involves both intracellular Ca²⁺ release from ryanodine-gated Ca²⁺ stores and extracellular Ca²⁺ influx via capacitative calcium entry. Each individual cell operates as an independent calcium oscillator with time variance in frequency and amplitude. Vasopressin-induced Ca²⁺ mobilization is mediated by cAMP, but is independent of PKA. Exogenous cAMP analog (8-pCPT-2′-O-Me-cAMP), which activates Epac (exchange protein directly activated by cAMP), but not PKA, triggers Ca²⁺ mobilization and apical exocytosis. These observations suggest that activation of Epac by cAMP may also contribute to the action of vasopressin in regulating osmotic water permeability. There are multiple plausible candidates for downstream effectors of vasopressin-induced Ca²⁺ signal including calmodulin, myosin light chain kinase, calmodulin kinase II, and calcineurin. All of them have been implicated in the regulation of aquaporin-2 trafficking and/or water permeability.